Rules and Regulations for Investing in Myanmar

Governing Bodies

Myanmar Investment Commission (MIC)

• The MIC is the principal authority overseeing investment-related activities.

• It is responsible for approving large-scale investment projects, providing investment incentives, and ensuring compliance with Myanmar’s laws.

Special Economic Zone Authorities

• For investments in SEZs, specific zone management committees oversee regulatory compliance and provide administrative support.

Ministries and Departments

• Relevant ministries regulate sector-specific investments (e.g., Ministry of Agriculture, Livestock and Irrigation for agribusiness, Ministry of Mines for mineral exploration).

Key Investment Laws

Myanmar Investment Law (MIL) (2016)

• The MIL provides the legal framework for both foreign and domestic investments.

• It outlines rules for investment approvals, dispute resolution, tax incentives, and land use.

• Investors must apply for an MIC permit or endorsement to access tax benefits and land leases.

Companies Law (2017)

• The Myanmar Companies Law governs the registration and operation of companies.

• Foreigners can own up to 35% of a company while retaining the status of a "local company," enabling participation in restricted sectors.

Special Economic Zone (SEZ) Law (2014)

• The SEZ Law governs investments within SEZs, offering streamlined procedures, tax incentives, and infrastructure support.

Investment Restrictions

Prohibited Activities

• Investments that may harm the environment, public health, or national security are prohibited.

• Certain activities, such as the production of arms and ammunition, are reserved for the government.

Restricted Activities

• Investments in restricted sectors require joint ventures with local partners or special approvals. Examples include:

  • Agriculture and fisheries.

  • Media and broadcasting.

  • Mining and energy.

Approval from Relevant Authorities

• Investments in sensitive sectors (e.g., telecommunications, banking, mining) require additional licenses and permits from respective ministries.

Company Registration

Steps to Register a Business

1. Reserve a company name via the Myanmar Companies Online (MyCO) portal.

2. Submit incorporation documents, including Articles of Association and shareholder details.

3. Pay the registration fee.

4. Receive the Certificate of Incorporation.

Registered Office Requirement

• All companies must have a registered office in Myanmar.

Annual Returns

• Companies must file annual returns to maintain compliance with the Companies Law.

Taxation and Compliance

Corporate Tax

• The corporate tax rate is generally 25%, but exemptions and reductions may apply based on MIC approvals.

Withholding Tax

• Applies to payments such as royalties, interest, and dividends paid to non-residents.

Value-Added Tax (VAT)

• Myanmar imposes a commercial tax ranging from 5-15%, depending on the nature of goods and services.

Social Security Contributions

• Employers must contribute to the social security fund for their employees.

Labor Laws

Employment Contracts

• Employers must issue written employment contracts in the Myanmar language.

• Contracts should outline terms of employment, wages, benefits, and working conditions.

Labor Dispute Resolution

• Labor disputes are managed under the Settlement of Labor Disputes Law (2012).

Work Permits for Foreign Employees

• Foreign workers require valid work permits and visas to work in Myanmar.

Land Use Regulations

Land Ownership

• Foreign investors cannot own land but may lease land for up to 50 years, with potential extensions of 10+10 years.

Land Use Permits

• Investors must obtain proper land use permits, particularly for agriculture, mining, and infrastructure projects.

Environmental Impact Assessments (EIA)

• Large-scale projects require EIAs to ensure compliance with environmental regulations.

Intellectual Property Rights

Trademark and Patent Registration

• The Trademark Law (2019) enables the registration of trademarks in Myanmar.

• Investors should register their trademarks, patents, and copyrights to protect their intellectual property.

Foreign Exchange Regulations

Currency Restrictions

• The Central Bank of Myanmar regulates the use of foreign currencies.

• Transactions must generally be conducted in Myanmar Kyat (MMK), with certain exceptions for export-oriented businesses.

Profit Repatriation

• Investors may repatriate profits in foreign currency after meeting all tax obligations and regulatory requirements.

Anti-Corruption and Compliance

Anti-Corruption Law (2013)

• The law prohibits bribery and corruption in business dealings.

• Companies must ensure compliance with anti-corruption regulations to avoid penalties.

Due Diligence

• Investors are encouraged to perform thorough due diligence on potential partners, local regulations, and market conditions.

Dispute Resolution Mechanisms

Arbitration

• Myanmar recognizes international arbitration under the Arbitration Law (2016).

• Investors can resolve disputes using institutions such as the Singapore International Arbitration Centre (SIAC).

Judicial System

• Commercial disputes can also be resolved through Myanmar’s legal system, though arbitration is preferred for efficiency.

Sector-Specific Regulations

Banking and Finance

• Investments in banking require a license from the Central Bank of Myanmar.

Telecommunications

• The Ministry of Transport and Communications regulates telecommunications investments.

Mining

• Mining licenses and permits must be obtained from the Ministry of Mines.

Compliance with Local Laws

Adherence to Regional and Local Laws

• Investors must comply with both national and regional regulations, particularly for land use and environmental protection.

Community Engagement

• Projects impacting local communities must include community engagement plans to align with Myanmar’s social and environmental standards.

Conclusion

Myanmar's rules and regulations for investors are designed to create a balanced, transparent, and secure investment environment. While compliance with these regulations may require meticulous planning and legal guidance, they offer robust protections and opportunities for investors.